Letter to the Editor: Crypto-currency technology to change banking

Saturday

In a presentation last week, Mr. Henry Kaufman, a well-known local economist, briefly gave his thoughts on Bitcoin: "I would rather buy tulips."

He is, of course, referring to the Dutch "tulip-mania" of the 1630s. This is economist-speak for: It’s a bubble. Stay away.

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"It is not a medium of exchange," Kaufman said. "It is not a store of value."

He may have a point. Tulips can be traded; tulips can store value. But can tulips insure my car? Can tulips build a better, more efficient healthcare system? Can tulips install affordable electric grids in third-world nations?

Can tulips do all of these things without involving any banks at all? Probably not.

What I’ve described is not just theory: It’s happening. Thousands of people’s lives have already been affected thanks to "crypto-currency" technology. All of them are now part of a nascent global economy untouched by the top 10 American banks.

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This is because, while economists have been busy hounding Bitcoin, "crypto" – the technology that first made Bitcoin possible — has continued evolving at an exponential rate.

Today, the world’s smartest programmers no longer work for Google or Apple or Microsoft; they’ve moved on to the world of crypto-currency.

Mr. Kaufman made his "tulip" remark during a presentation about his book, titled Tectonic Shifts in Financial Markets. The book expresses his concern about the power of the big banks to cripple the economy and offers insight in preventing another 2008.

Specifically, he says he is concerned because America’s 10 largest banks hold 80 percent of the nation’s financial assets.

Whatever his thoughts on Bitcoin in particular, Kaufman is, perhaps unwittingly, making the case for crypto in general: What better way to disempower the big banks, and take the burden of responsibility away from the government, than to empower the people with the freedom to opt out of traditional banking entirely?

It’s time to stop talking Bitcoin and start talking crypto — the technology that will forever change the way we as a society bank and exchange value. Whatever the daily price fluctuations, no one can deny that this technology is sorely needed.

It is growing. It is here to stay. And that’s something you can bank on.